Core Insights - Income investing is most effective when dividends are linked to sustainable business models rather than yield traps [2] - The best opportunities combine high current income with credible catalysts for future payouts [2] Company Analysis - Philip Morris International (NYSE: PM) has raised its dividend by 8.9% to an annualized $5.88, resulting in a current yield of 3.84% [5] - Smoke-free products accounted for 39% of total revenue in 2024, a significant increase from negligible levels a decade ago [6] - The company has seen success with Iqos heated-tobacco devices in Japan and parts of Europe, and ZYN nicotine pouches are the fastest-growing nicotine format in the U.S. [6] - Recent developments include the dismissal of a pricing antitrust lawsuit against ZYN and the FDA's withdrawal of a proposed menthol cigarette ban, which strengthens the company's market position [7] Valuation and Yield - A pharmaceutical company is trading at 8 times forward earnings with a 7% yield, while raising revenue guidance and reentering the obesity drug market [9] - Both Philip Morris and the pharmaceutical company offer immediate income along with turnaround potential, although there are regulatory and execution risks involved [9]

Market Overview - Wall Street has experienced volatility in 2025 due to overstretched valuations of U.S. stocks, persistent inflation, weak economic data, geopolitical conflicts, and concerns regarding the Trump administration's trade policies [1] - The Federal Reserve's uncertainty over rate cuts, recession fears, and the emergence of a low-cost Chinese AI platform have contributed to investor unease [1] Investment Strategy - It is advisable to invest in high dividend-paying corporate giants, which typically possess strong financial positions, robust business models, and globally recognized brand value [2] - Regular dividend payments from these firms can provide a steady income stream during market fluctuations [2] Company Highlights Philip Morris International Inc. (PM) - Zacks Rank 1, benefiting from strong pricing power and an expanding smoke-free product portfolio, aiming to become substantially smoke-free by 2030 [6][7] - Expected revenue and earnings growth rates of 8.1% and 13.7% respectively for the current year, with a current dividend yield of 3.01% [8] CVS Health Corp. (CVS) - Zacks Rank 2, investing in technology to reduce costs and enhance customer experience, with plans to close 271 stores to save over $500 million in 2025 [9][10] - Expected revenue and earnings growth rates of 3.7% and 12.6% respectively for the current year, with a current dividend yield of 4.34% [10] Energy Transfer LP (ET) - Zacks Rank 2, benefiting from long-term fee-based contracts, with nearly 90% of earnings from such contracts [11][13] - Expected revenue and earnings growth rates of 18.2% and 12.5% respectively for the current year, with a current dividend yield of 7.30% [13] GSK plc (GSK) - Zacks Rank 2, strong position in HIV and Vaccines, with increased sales growth in Specialty Medicines and promising new products [14][15] - Expected revenue and earnings growth rates of 5.1% and 6.7% respectively for the current year, with a current dividend yield of 4.28% [16] NatWest Group plc (NWG) - Zacks Rank 1, providing a range of banking and financial services in the UK and internationally [17][18] - Expected revenue and earnings growth rates of 20.1% and 17.3% respectively for the current year, with a current dividend yield of 5.41% [19]